Alliance Trust underperforms following Brexit vote


Investment performance at Alliance Trust has been hit by the UK’s vote to leave the EU.

According to the assets manager’s half year results, total returns were 6.6 per cent, compared to the MSCI ACWI benchmark of 12 per cent.

The underperformance occured in June, the firm says. In addition to the Brexit vote, a pension scheme buy-in and debt valuations hit returns.

Net inflows at Alliance Trust Investments were £25m while assets under administration at platform Alliance Trust Savings rose around 40 per cent, from £8.5bn in January 2016 to £12bn at the end of June.

Chairman Lord Smith says: “In volatile markets we continue to make good progress against the initiatives outlined last year to enhance shareholder value.

“Costs are coming down, ATI and ATS are making good strides towards profitability, and a fully non-executive Board is in place.”

He adds: “Investment performance in the period underperformed the benchmark, reflecting the turbulent market conditions around the EU referendum when the Trust’s quoted equity portfolio gave up the outperformance it had recorded over the prior five months.

“However, since the period end Alliance Trust’s share price has reached new highs.”

Earlier this year Alliance Trust was approached by Lord Rothschild-backed RIT Capital Partners in a takeover bid. However, talks collapsed in June.

Alliance Trust says: “We told our shareholders at the time that we would consider any proposal as part of the Group strategic review that we had already initiated. This review is ongoing and includes a broad range of possible courses of action. We are making good progress and intend to report on the outcome of our review later in the year.”